Petronas move to list 2 big units welcomed

Analysts say this is good good news for investors, considering that big new listings have been slow in coming to Bursa Malaysia


National oil firm Petroliam Nasional Bhd (Petronas) will list two "sizeable" subsidiaries with good track records on the local stock exchange this year, Prime Minister Datuk Seri Najib Razak said.

Analysts said this was good news for investors, considering that big new listings had been slow in coming to Bursa Malaysia, with sizeable companies like Astro All Asia Networks plc aiming to go private.

Last year, there were just 12 new listings on Bursa Malaysia.

"These initiatives have the goal to reduce the government's presence, directly or indirectly, in business activities that are best carried out by the private sector," Najib said at the Invest Malaysia 2010 conference in Kuala Lumpur yesterday.



He said Petronas had identified the companies to be listed, but did not name them.

"We have heard for some time that the Petronas group was looking at listing some of its subsidiaries. So we look forward to hearing the details of that. We're very much looking foward to the (listings) happening," Bursa Malaysia chief executive officer Datuk Yusli Mohamed Yusoff told reporters on the sidelines of the conference.

Fund managers voiced hope that the two companies would have a decent-sized free float, or amount of shares available for public trading. This has been a key complaint among investors in Malaysia - that there are not enough shares available for trading among the listed companies.

"Petronas already has some companies listed in the market, but they're not so liquid," a fund manager noted.

"When you talk about liquidity in the market today, Bursa allows companies to come to market at 25 per cent free float. But I think we should change some of these rules. Make it at least 40 per cent so that will increase liquidity, which will then allow for higher weightage and this will help the market as a whole," said Pankaj Kumar, chief investment officer at Kurnia Insurans (Malaysia) Bhd.

Yusli said the current requirement was adequate when benchmarked against other markets and the exchange had no plans to change that for now.

"Although 25 per cent is the minimum, we would like to see a much higher level. We would love to see overall free float go beyond 50 per cent," he remarked. - By Adeline Paul Raj